Indices of World Market Stock Exchanges

US DJIA S&P 500 NASDAQ 13,880.60 1,502.42 3,131.49 -46.92 -9.53 -32.92 -0.34% -0.63% -1.04%

EUROPE STOXX 50 FTSE 100 DAX ASIA NIKKEI HANG SENG S&P/ASX 200 Sources: Bloomberg 11,258.40 22,906.70 5,045.30 -50.69 -400.74 +65.21 -0.45% -1.72% +1.31% 2,579.76 6,291.54 7,583.57 -60.59 -103.83 -145.33 -2.29% -1.62% -1.88%

Commentary on Todays KLCI

FMB: KLCI closed at 1614.05, gained 0.72 points or 0.04% points on Thursday. From our point of view, KLCI is closing to the support or psychological level of 1600, it is very likely to break below 1600 when the GE13 is getting closer. Todays market opens at 1617.29, gained 3.24 points from yesterday. Perhaps is the opitmism from the recent announcement of 6.4% GDP growth of Malaysia, or the general reverse momentun after a sharp fall. Nonetheless, we deemded that the fall of KLCI in the coming moment is almost ineviatable. As such, there will be the opportunity for long-term investors to add worthy income shares (blue chips) into their portfolio.

Economies Highlights: FRANCE Government debt 86% of GDP and budget/fiscal deficit of 4.5% of GDP President Hollande has tax and spend policy: Not interested in austerity measures Criticism from IMF (recommends austerity drive) and Labour Minister Michel Sapin (totally bankrupt) Economic growth of 03% in 2012 and projection of 0.9% in 2013 UNITED KINGDOM Government debt of 81% of GDP and 9% fiscal deficit PM David Cameron's policy: austerity drive to cut deficit and increase tax Economy to have grown 1% in 2012 and to grow 1.9% in 2013 They need an answer to boost economic growth

UNITED STATES Government debt of 102% of GDP and fiscal deficit of 10% Obama policy: increased tax and reduced spending. Obamacare and sweeping new financial regulations. More taxes for the rich and less for the poor and middle income "Fiscal Cliff" is the sharp decline in budget deficit that could 1 have occurred beginning 2013 due to increased taxes and reduced spending as required by previously enacted laws Economic growth of 2% in 2012 and 3% in 2013 CHINA Government debt of 26% of GDP, fiscal surplus GDP growth is between 8-9% Banking system: No free flow of capital into and out of the country. Most of its capital is from deposits from households. Government sets interest rate below the rate of inflation, meaning savers earn negative rate of return. What's bad for savers is good for spenders. MALAYSIA Government debt is 53% of GDP, fiscal deficit of 4.5% Transformation programme to reach developed status by 2020 (income per capita of US$15,000) Private-public partnership to foster growth Aiming at sustainable growth with balanced development GDP growth reported at 6.4%
Sources: The Star

Stock Recommedation: SKPRES (7155) - A Choice of Resilient Counter In The Times of Market Anxiety Current Price: RM0.34 Target Prices: RM0.54 (Kenanga Research) RM0.54 (OSK Research) RM0.58 (TA Securities) Corporate profile: SKPRES is principally involved in the manufacturing of plastic parts and components, contract manufacturing, precision mould making, the sub-assembly of electronic and electrical equipment and other secondary processes. Fundamental analysis: We like the companys strong balance sheet and earnings growth, as well as its increasing valuation. This is backed by a dividend yield of forecasted 6.8% for 2013 and forecasted 8.4% for 2014. Directors efforts to polish the companys image. Dato Gan Kim Huat the Executive Chairman and Managing Director of SKPRES had invited LembagaTabung Haji to purchase 10% of SKPRES shares to become the substantial shareholder and the contract had been confirmed and signed. The move will create more public awareness of the company and its valuation is likely to adjust accordingly. Healthy balance sheet. The groups balance sheet remained solid, with a net cash position of 9.8 sen per share as the company replenished its coffers with RM26.2m in cash and cash equivalents during the third quarter of 2012. Positive free cash flow since FY08. SKPRES retained earnings stood at RM101.9m as at 1QFY13 while cash and bank balances totaled RM71.6m. The company has no borrowings.

Strong earnings growth. SKPRESs 1HFY13 is making up of 51.9% and 51.6% of consensus full-year
forecasts. Revenue increased 44.2% y-o-y while earnings grew 64.9% y-o-y, bolstered by stronger demand for its plastic moulding products and value added services. Attractive dividend yield of >7%. Armed with its strong coffers and net cash per share of 8 sen per share as at end-June 2012, the company has consistently paid out dividends and has been raising its dividend in the past 2 financial years. The top management has set a policy of paying of 50% of its profits as dividend. Declared 1.3 sen dividend. Backed by 9.8 sen cash per share for the reporting quarter vs. 8 sen per share in 1Q13, management declared an interim dividend of 1.3 sen per share. This represents 52% of full-year dividend forecast of 2.5 sen per share. The entitlement date for the dividend is 22 Nov with payment on 21 Dec. At current prices, the stock still offers an alluring dividend yield of 6.8% for FY13 and 8.4% for FY14.
Sources: OSK Research

Technical View: Chart

Resistance = RM0.375

Support = RM0.33

High Volume Improved Volume

Strong supports were found at RM0.33 in the historical prices, purchase can be made at RM0.34. Therefore, with the price traded lower than RM0.33 there should be a stop-loss. If the recent high of RM0.375 is violated, the price is likely to trade higher until next the resistance level. There was a slight improved volume after price RM0.375 then remained quiet; the market might be waiting to speculate until next hot time. Summary: Robust fundamentals, technically right time to enter during bewildered market. Prepared by Marshall Liew Kher Yau & Mohd. Shahrulnizam,
Disclaimer: The information and opinions in these slides were prepared by RHB Branch Broking. The investments discussed or recommended in these slides may not be suitable for all investors. These slides have been prepared for discussion purposes only and are not an offer to sell or a solicitation to buy any securities. The employees of RHB Branch Broking may from time to time have a position in or with the securities mentioned herein. Members of the RHB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of these slides. All opinions and estimates included in this session constitute our judgement as of this date and are subject to change without notice.